It is enough to take courses in Icelandic, you don't have to take exams as well. You need to attend a 150-hour course that is held by an acknowledged educational institution.

A confirmation of studies in Icelandic at the University of Iceland or Icelandic secondary schools is also accepted.

If you already know Icelandic, you can take a status test at an acknowledged educational institution. If you pass that test, you do not need to take a course in Icelandic.